The lowest availability rate in the Thames Valley, a rental increase of 31%, solid latent demand and improved transport links are rapidly making the case for office development in Newbury, according to Lambert Smith Hampton’s Thames Valley Office Market Report 2017.
There had been no office construction in Newbury for many years as investors had been cautious about a perceived lack of demand and rental values had been subdued due to a lack of quality grade A stock.
As a result, Newbury has the lowest availability rate in the Thames Valley at only 2%. Three buildings provide the vast majority of the 76,000 sq ft availability, which is all grade A space.
However, in 2016, speculative development returned to the market, with 28,000 sq ft of exposed services design offices constructed at 3 The Sector. This space was fully let by Q1 2017.
Following 13 years of headline prime rents remaining close to £17.00/£17.50 per s ft, they increased by 31% to a new high of £23.50 per sq ft at the end of 2016. In this transaction, the landlord, Vengrove, set the rent for an extremely high quality build incorporating exposed service design at 3 The Sector. The occupier, Cirrus Logic, was happy to pay this level to secure the space.
Hannah Bennett, senior surveyor for Lambert Smith Hampton, explains: “As the level of quality in the town continues to improve through innovative development and refurbishment, and with office availability being at a record low, Newbury is very well placed to demand higher headline rents. By delivering contemporary, differentiated offices, landlords have already benefitted from significant rental growth.”
